ABSTRACT
This chapter shows how a new technology benefits the customers of, and sane input suppliers to, the industry employing it, but that other input suppliers may be hurt by the reduced demand for those inputs. It describes a brief statement of its major contribution, followed by the description of the model. The chapter discusses the effects of pure technological change, and the technological change accompanied by structural change followed by implications for productivity measurement. The model is a multimarket equilibrium system which simultaneously equates supply and demand in three input markets and the product market and calculates profits, expenditures, consumers' surplus, and a number of alternative productivity measures. Structural change is modelled by rules governing firm entry and exit, and the rules governing the diffusion of technology. Productivity index numbers are examined for firms within the different technological cohorts, and compared with the usual approach involving a single productivity index for the industry.
